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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3930 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 3930

  To provide downpayment assistance to first-generation homebuyers to 
address multigenerational inequities in access to homeownership and to 
narrow and ultimately close the racial homeownership gap in the United 
                    States, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 12, 2024

 Mr. Warnock (for himself, Ms. Butler, Mr. Brown, and Mr. Van Hollen) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
  To provide downpayment assistance to first-generation homebuyers to 
address multigenerational inequities in access to homeownership and to 
narrow and ultimately close the racial homeownership gap in the United 
                    States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Downpayment Toward Equity Act of 
2024''.

SEC. 2. DEFINITIONS.

    In this section:
            (1) Affirmatively further fair housing.--The term 
        ``affirmatively further fair housing'' has the same meaning as 
        defined by the Secretary to implement section 808(e)(5) of the 
        Fair Housing Act (42 U.S.C. 3608(e)(5)).
            (2) Eligible entity.--The term ``eligible entity'' means--
                    (A) a minority depository institution, as defined 
                in section 308 of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 
                note);
                    (B) a community development financial institution, 
                as defined in section 103 of the Riegle Community 
                Development and Regulatory Improvement Act of 1994 (12 
                U.S.C. 4702), that is certified by the Secretary of the 
                Treasury and targets services to minority and low-
                income populations or provides services in 
                neighborhoods having high concentrations of minority 
                and low-income populations;
                    (C) any other nonprofit, mission-driven entity that 
                the Secretary finds has a track record of providing 
                assistance to homeowners, targets services to minority 
                and low-income populations, or provides services in 
                neighborhoods having high concentrations of minority 
                and low-income populations; and
                    (D) a unit of general local government, as defined 
                in section 102 of the Housing and Community Development 
                Act of 1974 (42 U.S.C. 5302).
            (3) Eligible home.--The term ``eligible home'' means a 
        residential dwelling, including a unit in a condominium or 
        cooperative project or a manufactured housing unit, that meets 
        the requirements of section 5.
            (4) Eligible mortgage loan.--The term ``eligible mortgage 
        loan'' means a residential mortgage loan that meets the 
        requirements of section 6.
            (5) First-generation homebuyer.--The term ``first-
        generation homebuyer'' means a homebuyer that is--
                    (A) an individual--
                            (i) whose parents or legal guardians do 
                        not, or did not at the time of their death, to 
                        the best of the individual's knowledge, have 
                        any present ownership interest in a residence 
                        in any State, excluding ownership of heir 
                        property or ownership of chattel; and
                            (ii) whose spouse or domestic partner has 
                        not, during the 3-year period ending upon 
                        acquisition of the eligible home to be acquired 
                        using such assistance, had any present 
                        ownership interest in a residence in any State, 
                        excluding ownership of heir property or 
                        ownership of chattel, whether the individual is 
                        a co-borrower on the loan or not; or
                    (B) an individual who has at any time been placed 
                in foster care or institutional care whose spouse or 
                domestic partner has not, during the 3-year period 
                ending upon acquisition of the eligible home to be 
                acquired using such assistance, had any ownership 
                interest in a residence in any State, excluding 
                ownership of heir property or ownership of chattel, 
                whether such individuals are co-borrowers on the loan 
                or not.
            (6) Heir property.--The term ``heir property'' means 
        residential property for which title passed by operation of law 
        through intestacy and is held by 2 or more heirs as tenants in 
        common.
            (7) Ownership interest.--The term ``ownership interest'' 
        means any ownership, excluding any interest in heir property, 
        in--
                    (A) real estate in fee simple;
                    (B) a leasehold on real estate under a lease for 
                not less than 99 years which is renewable; or
                    (C) a fee interest in, or long-term leasehold 
                interest in, real estate consisting of a 1-family unit 
                in a multifamily project, including a project in which 
                the dwelling units are attached, or are manufactured 
                housing units, semi-detached, or detached, and an 
                undivided interest in the common areas and facilities 
                which serve the project.
            (8) Qualified homebuyer.--The term ``qualified 
        homebuyer''--
                    (A) means a homebuyer who meets the requirements of 
                section 4; and
                    (B) includes homebuyers consisting of multiple 
                individuals, co-purchasers, and multi-member 
                households.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (10) Shared equity homeownership program.--The term 
        ``shared equity homeownership program'' means affordable 
        homeownership preservation through a resale restriction program 
        administered by a community land trust, other nonprofit 
        organization, or State or local government or 
        instrumentalities.
            (11) Socially and economically disadvantaged individual.--
        The term ``socially and economically disadvantaged individual'' 
        means an individual who meets the following requirements:
                    (A) Social disadvantage.--
                            (i) In general.--The individual is a member 
                        of a socially disadvantaged group, whose 
                        members have historically been subjected to 
                        racial or ethnic discrimination within the 
                        United States because of their identity as 
                        members of such group without regard to their 
                        individual qualities.
                            (ii) Presumption; rebuttal.--An individual 
                        identifying as Black, Hispanic, Native 
                        American, or Asian American, or any combination 
                        thereof, shall be presumed to be socially 
                        disadvantaged for purposes of clause (i). Such 
                        presumption may be rebutted with credible 
                        evidence to the contrary.
                            (iii) Burden of proof.--An individual who 
                        does not identify as described in clause (ii) 
                        shall be required to establish individual 
                        social disadvantage for purposes of clause (i) 
                        by a preponderance of the evidence.
                            (iv) Rules.--The Secretary may issue 
                        regulations as necessary to establish 
                        procedures for complying with this 
                        subparagraph.
                    (B) Economic disadvantage.--The individual has an 
                income that meets the requirements under section 4(a).
            (12) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        and the tribal government of any Indian tribe, as defined in 
        section 4 of the Native American Housing Assistance and Self-
        Determination Act of 1996 (25 U.S.C. 4103).

SEC. 3. FIRST-GENERATION DOWNPAYMENT ASSISTANCE PROGRAM.

    (a) Establishment.--The Secretary shall carry out a program under 
this Act to provide grants to States and eligible entities to provide 
financial assistance under this section to first-generation homebuyers 
to assist them with acquiring owner-occupied primary residences.
    (b) Allocation.--After reserving amounts as required under sections 
7(d) and 9(b), any remaining amounts made available to carry out this 
Act shall be allocated as follows:
            (1) States.--75 percent of such amounts shall be allocated 
        among States in accordance with a formula established by the 
        Secretary, which shall--
                    (A) take into consideration the best available data 
                to provide more funding to States with a higher 
                approximate number of potential qualified homebuyers; 
                and
                    (B) be adjusted to reflect median area home prices.
            (2) Eligible entities.--25 percent of such amounts shall be 
        made available only to eligible entities on a competitive 
        basis.
    (c) Assistance.--Amounts from a grant under this Act shall be used 
only to provide assistance--
            (1) on behalf of a qualified homebuyer; and
            (2) for--
                    (A) costs in connection with the acquisition, 
                involving an eligible mortgage loan, of an eligible 
                home, including downpayment costs, closing costs, and 
                costs to reduce the rates of interest on eligible 
                mortgage loans;
                    (B) subsidies to make shared equity homes 
                affordable to homebuyers by discounting the price for 
                which the home will be sold and to preserve the 
                affordability of the home for subsequent homebuyers; 
                and
                    (C) pre-occupancy home modifications required to 
                accommodate qualified homebuyers or members of their 
                household with disabilities.
    (d) Amount.--A grant of assistance under this Act--
            (1) may be provided on behalf of any qualified homebuyer 
        only once; and
            (2) may not exceed the greater of $20,000 or 10 percent of 
        the purchase price in the case of a qualified homebuyer, not to 
        include assistance received under subsection (c)(2)(C) for 
        disability related home modifications, except that the 
        Secretary may increase such maximum limitation amounts--
                    (A) for qualified homebuyers who are socially and 
                economically disadvantaged; or
                    (B) in the case of qualified homebuyers acquiring 
                residences located in high-cost areas, as determined 
                based on median home prices or prices of residences 
                under a shared equity homeownership program.
    (e) Layering of Assistance.--Assistance from grant amounts under 
this Act may be provided on behalf of a qualified homebuyer who is 
receiving assistance from other sources, including other State, 
Federal, local, private, public, and nonprofit sources, for acquisition 
of an eligible home.
    (f) State Administration.--
            (1) In general.--The Secretary shall require that each 
        State receiving grant amounts under this Act administer the 
        program to provide assistance with such amounts through the 
        State housing finance agency for the State or such other 
        housing agency of the State as the Secretary finds appropriate, 
        except that any such agency may, at the option of the agency, 
        contract with a nonprofit entity, including a housing 
        counseling agency approved by the Secretary, to administer such 
        assistance.
            (2) Affirmatively furthering fair housing.--For a State to 
        be eligible for a grant under this Act, the State shall be in 
        compliance with the Secretary's regulations implementing the 
        requirement to affirmatively further fair housing.
            (3) Prohibition of priority or recoupment of funds.--In 
        selecting qualified homebuyers for assistance with grant 
        amounts under this Act, a State or eligible entity may not--
                    (A) provide any priority or preference for 
                homebuyers who are acquiring eligible homes with a 
                mortgage loan made, insured, guaranteed, or otherwise 
                assisted by the State housing finance agency for the 
                State, any other housing agency of the State, or an 
                eligible entity when applicable; or
                    (B) seek to recoup any funds associated with the 
                provision of downpayment assistance to the qualified 
                homebuyer, whether through premium pricing or 
                otherwise, except as provided in subsection (g) or 
                otherwise authorized by the Secretary.
    (g) Recapture and Reallocation.--The Secretary shall require 
changes in a grantee's policy or distribution of funds or recapture any 
amounts remaining available to a grantee, and reallocate such funds 
among other States and eligible entities, if the Secretary determines 
in his or her sole discretion that--
            (1) a State or eligible entity--
                    (A) has not demonstrated the capacity to expend 
                grant funds in a timely manner that furthers the 
                purposes under this Act; or
                    (B) is distributing or plans to distribute grant 
                funds in a manner that results or will predictably 
                result in qualified homebuyers from racial or ethnic 
                groups that have faced historic obstacles to 
                homeownership failing to receive the benefits of such 
                funds in proportion to their population among qualified 
                homebuyers in the relevant area; or
            (2) there is insufficient demand among qualified eligible 
        entities to distribute funds.
    (h) Uniformity and Program Standardization.--The Secretary shall 
establish a uniform set of requirements to which each State and 
eligible entity receiving grant amounts under this Act shall comply.

SEC. 4. QUALIFIED HOMEBUYERS.

    (a) Requirements.--Assistance from grant amounts under this Act may 
be provided only on behalf of a homebuyer who meets all of the 
following requirements:
            (1) Income.--The household of the homebuyer has an income 
        that does not exceed--
                    (A) 120 percent of median income for the area (as 
                determined by the Secretary) within which--
                            (i) the eligible home to be acquired using 
                        such assistance is located; or
                            (ii) the place of residence of the 
                        homebuyer is located; or
                    (B) in the case of a homebuyer acquiring an 
                eligible home that is located in a high-cost area, as 
                determined by the Secretary, 140 percent of the median 
                income for the area within which the eligible home to 
                be acquired using such assistance is located.
            (2) First-time homebuyer.--The homebuyer, as self-attested 
        by the homebuyer, is a first-time homebuyer, as defined in 
        section 104 of the Cranston Gonzalez National Affordable 
        Housing Act (42 U.S.C. 12704), except that--
                    (A) for the purposes of this Act the reference in 
                such section 104 to title II shall be considered to 
                refer to this Act; and
                    (B) ownership of heir property shall not be treated 
                as owning a home for purposes of determining whether a 
                borrower qualifies as a first-time homebuyer.
            (3) First-generation homebuyer.--The homebuyer, as self-
        attested by the homebuyer, is a first-generation homebuyer.
    (b) Reliance on Borrower Attestations.--No additional documentation 
beyond the borrower's attestation shall be required to demonstrate 
eligibility under paragraphs (2) and (3) of subsection (a), and no 
creditor shall be subject to liability, including monetary penalties or 
requirements to indemnify a Federal agency or repurchase a loan that 
has been sold or securitized, for the provision of downpayment 
assistance under this Act to a borrower who does not meet the 
eligibility requirements if the creditor does so in good faith reliance 
on borrower attestations of eligibility required by this Act or 
regulation.

SEC. 5. ELIGIBLE HOMES.

    (a) In General.--Assistance from grant amounts under this Act may 
be provided only in connection with the acquisition by a qualified 
homebuyer of a residential property that--
            (1) consists of 1 to 4 dwelling units; and
            (2) will be occupied by the qualified homebuyer, in 
        accordance with such assurances and commitments as the 
        Secretary shall require, as the primary residence of the 
        homebuyer, subject to section 4.
    (b) Repayment of Assistance.--
            (1) Requirement.--The Secretary shall require that, if a 
        homebuyer to or on behalf of whom assistance is provided from 
        grant amounts under this Act fails or ceases to occupy the 
        property acquired using such assistance as the primary 
        residence of the homebuyer, except in the case of assistance 
        provided in connection with the purchase of a principal 
        residence through a shared equity homeownership program, the 
        homebuyer shall repay to the State or eligible entity, as 
        applicable, in a proportional amount of the assistance the 
        homebuyer receives based on the number of years they have 
        occupied the eligible home up to 5 years, except that no 
        assistance shall be repaid if the qualified homebuyer occupies 
        the eligible home as a primary residence for 5 years or more.
            (2) Limitation.--Notwithstanding subparagraph (A), a 
        homebuyer to or on behalf of whom assistance is provided from 
        grant amounts under this Act shall not be liable to the State 
        or eligible entity for the repayment of the amount of such 
        shortage if the homebuyer fails or ceases to occupy the 
        property acquired using such assistance as the principal 
        residence of the homebuyer at least in part because of a 
        hardship, or sells the property acquired with such assistance 
        before the expiration of the 60-month period beginning on such 
        date of acquisition and the capital gains from such sale to a 
        bona fide purchaser in an arm's length transaction are less 
        than the amount the homebuyer is required to repay the State or 
        eligible entity under subparagraph (A).

SEC. 6. ELIGIBLE MORTGAGE LOANS.

    Assistance from grant amounts under this Act may be provided only 
in connection with the acquisition of an eligible home involving a 
residential mortgage loan that--
            (1) meets the underwriting requirements and dollar amount 
        limitations for acquisition by the Federal National Mortgage 
        Association or the Federal Home Loan Mortgage Corporation;
            (2) is made, insured, or guaranteed under any program 
        administered by the Secretary;
            (3) is made, insured, or guaranteed by the Department of 
        Agriculture;
            (4) is a qualified mortgage, as defined in section 
        129C(b)(2) of the Truth in Lending Act (15 U.S.C. 1639c(b)(2)); 
        or
            (5) is guaranteed for the benefit of a veteran.

SEC. 7. HOUSING COUNSELING REQUIREMENT.

    (a) In General.--Except as provided pursuant to section 4, 
assistance with grant amounts under this Act may not be provided on 
behalf of qualified homebuyer unless such homebuyer has completed a 
program of counseling with respect to the responsibilities and 
financial management involved in homeownership before entering into a 
sales purchase agreement or loan application, except as provided under 
subsection (c), as the Secretary shall require, provided through a 
counseling agency approved by the Secretary. Such program may be 
delivered in-person, virtually, by telephone, or any other method the 
Secretary determines acceptable and shall include providing information 
on fair housing rights and on the availability of post-purchase housing 
counseling opportunities and instruction on how to file a fair housing 
complaint.
    (b) Alternative Requirement.--The Secretary shall provide that if a 
qualified homebuyer is unable to complete the requirement under 
subsection (a) within 30 days due to housing counseling agency capacity 
issues, a State or eligible entity may allow such qualified homebuyer 
to complete alternative homebuyer education to fulfill the requirement 
under subsection (a), including homebuyer education that is provided 
through an online platform, and such qualified homebuyer shall be made 
aware of the availability of post-purchase housing counseling 
opportunities.
    (c) Referral Upon Mortgage Denial.--The Secretary shall require 
that any qualified homebuyer who has completed a counseling program 
referred to in subsection (a) or alternative requirement pursuant to 
subsection (b), who receives a commitment for assistance with grant 
amounts under this Act and who applies for an eligible mortgage loan 
for acquisition of an eligible home and is denied such mortgage loan, 
shall be referred to a counseling agency described in subsection (a) 
for counseling relating to such denial and for re-qualification. An 
eligible homebuyer may be re-qualified at least 1 additional time in a 
calendar year, or more as determined by the Secretary.
    (d) Funding.--Of any amounts appropriated to carry out this Act, 
the Secretary shall use not less than 5 percent for costs of providing 
counseling referred to in subsection (a).

SEC. 8. ADMINISTRATIVE COSTS.

     States and eligible entities receiving grant amounts under this 
Act may use a portion of such amounts for administrative costs up to 
the limit specified by the Secretary.

SEC. 9. REPORTS.

    (a) Annual Report.--
            (1) In general.--For each fiscal year during which the 
        Secretary makes grants under this Act, the Secretary shall 
        submit to Congress, and make publicly available online in an 
        easily accessible location on the website of the Department of 
        Housing and Urban Development, a report that shall include--
                    (A) demographic information regarding applicants 
                for and recipients of assistance provided pursuant to 
                this Act, including race, ethnicity, and gender;
                    (B) information regarding the types and amount of 
                assistance provided, including downpayment assistance, 
                assistance with closing costs, and assistance to reduce 
                mortgage loan interest rates; and
                    (C) information regarding properties acquired using 
                such assistance, including location, property value, 
                property type, and first mortgage type and investor.
            (2) Disaggregation.--All data included in an report 
        required under paragraph (1) shall be disaggregated by ZIP Code 
        or census tract level, whichever is most feasible, and 
        demographic information, including race, ethnicity, and gender, 
        and any other data points the Secretary deems appropriate 
        especially to observe equitable outcomes to ensure the grant 
        program is affirmatively furthering fair housing.
    (b) Capacity Building.--
            (1) In general.--Of any amounts appropriated to carry out 
        this Act, the Secretary shall use not more than 1 percent to 
        assist States and eligible entities to develop capacity to meet 
        the reporting requirements under subsection (a).
            (2) Consultation.--The Secretary shall encourage States and 
        eligible entities to consult with community-based and nonprofit 
        organizations that have as their mission to advance fair 
        housing and fair lending.
    (c) Privacy Requirements.--
            (1) In general.--Each State and eligible entity that 
        receives a grant under this Act shall establish data privacy 
        and security requirements for the information described in 
        subsection (a) that--
                    (A) include appropriate measures to ensure that the 
                privacy of the individuals and households is protected;
                    (B) provide that the information, including any 
                personally identifiable information, is collected and 
                used only for the purpose of submitting reports under 
                subsection (a); and
                    (C) provide confidentiality protections for data 
                collected about any individuals who are survivors of 
                intimate partner violence, sexual assault, or stalking.
            (2) Statistical research.--
                    (A) In general.--The Secretary--
                            (i) may provide full and unredacted 
                        information provided under subsection (a), 
                        including personally identifiable information, 
                        for statistical research purposes in accordance 
                        with existing law; and
                            (ii) may collect and make available for 
                        statistical research, at the census tract 
                        level, information collected under paragraph 
                        (1).
                    (B) Application of privacy requirements.--A 
                recipient of information under subparagraph (A) shall 
                establish for such information the data privacy and 
                security requirements described in paragraph (1).

SEC. 10. COMPELLING INTEREST STUDY.

    (a) In General.--The Secretary, in consultation with the Attorney 
General, shall survey and compile evidence to determine whether or not 
there is a sufficient history of discrimination in housing and, if so, 
the appropriate remedy to redress such historic discrimination.
    (b) Recommendations.--The Secretary shall make conclusions and 
recommendations based on the evidence compiled under subsection (a) and 
provide States and eligible entities granted awards under this Act an 
opportunity to modify their programs for assistance under this Act 
according to such recommendations.

SEC. 11. IMPLEMENTATION.

    The Secretary shall have the authority to establish by notice or 
mortgagee letter any requirements that the Secretary determines are 
necessary for timely and effective implementation of the grant program 
under this Act and the expenditure of funds appropriated, which 
requirements shall take effect upon issuance.

SEC. 12. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated for grants under this Act 
$100,000,000,000, and any amounts appropriated pursuant to this section 
shall remain available until expended.
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